This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the bottom of any article.

Managing Partner Maria Chrin says that, when the partners of Circle Wealth Management all worked together at Goldman Sachs prior to founding the firm, they were in search of a model that would allow them to manage money well in an independent mode. “After years of doing due diligence,” she says, “we decided it didn’t exist and we created it ourselves.”

Partner Ann Kaplan adds that they did a “tremendous amount of research” on wealth management solutions. While they looked for a “holistic integrated model that took into account people’s social and emotional issues regarding money, taxes, and the human elements that go into the equation of how to best manage a portfolio for people,” they also wanted to combine that with the best way “to be informed about the market and money managers.”

It’s All About the Client

With regard to the model, several aspects have to do with understanding the client and addressing not just the client’s investment desires, but also the framework of investing.

“Instead of conservative, moderate or aggressive,” says Chrin, the model moves toward preservation of capital as one allocation, growing with some liquidity as a second and growing with less liquidity for long periods of time as another. She adds that this changed model is “driven by who the client is, where they are in life, and what goals they have for themselves and future generations.”

Clients are educated so that they take an active role in the process. Of course, the clients of Circle Wealth are already pretty well educated—and sophisticated; Kaplan points out that “about half were in the financial industry themselves, and the other half have interesting companies and interact with the business environment and society in general.” She adds, “Clients often bring interesting ideas themselves.”

In addition, the firm works with multiple custodians, private banks and products, always looking for the best deal for the client, who is its only source of income. And when looking at such investments as hedge funds and private equity, the firm’s strategy is to look at them across the asset class, to find the best vehicle providing access to an asset class, rather than as an alternative investment.

2008 ‘Got us on the map’

While for many financial firms 2008 was a year of difficulty and high stress, the situation was different for Circle Wealth, which launched at the end of 2006. Chrin explains, “One of our other partners had been very thoughtful about understanding the industry and banks in particular. She had really good insight on what was going on” when Bear Stearns fell, the mortgage mess began, and hedge funds were blowing up.

So in the summer of 2007, the firm’s first full year, it went out on a limb (at least in the perception of some of its clients) and said that, in order to preserve capital, clients should put 50% of their assets into cash and leave the other 50% invested.

“Many said, ‘You’re crazy, don’t do it,’” remembers Chrin, but “others said yes. We were always focused on preserving first and growing second.” In 2008 the markets plunged, and that, says Chrin, “is really what got us on the map; for us it was a high point.” She explains that “people who were our clients, just a small number, felt really comfortable referring us to others they knew.”

Enhancing, Not Changing

So, while many firms may have changed their approach or their methods, Circle Wealth has not. Says Chrin, “We build, preserve and grow the wealth of our clients. We’ve actually not changed course, but enhanced what we did from day one.” She adds, “Ann [Kaplan] developed a macro framework that allows us to be in touch with what’s going on in the world to make sure we’re not reactive but proactive.”

Kaplan says the macro environment in 2008 demonstrated “how important the macro environment is. Fundamental values are being trumped by political decisions made by policymakers.” As a result, she continues, “We developed an asset allocation method based on macro views—to what extent do we think there might be a severe dislocation in a market, to where might we see good things.”

Personal Touch

Circle Wealth has experienced organic growth since its inception, with every new client coming in as a referral from an existing client. The search for new staff works the same way, says Chrin; “Everyone thus far that has come in here has been either an acquaintance of someone in the firm or was referred highly by someone we knew. Confidentiality is such an important part of what we do,” she adds, “we can’t afford to bring in just anyone.”

And people drive the firm’s biggest concerns as well. While at other firms principals might stay up at night worrying about markets and investing, Chrin says, “What keeps us up at night is people—clients and the internal team. Markets? We know how to deal with markets. They’re unpredictable, volatile and through many years we’ve been dealing with them.”

She adds, “There’s always something that feels new, but we know how to deal with them and create portfolios to deal with market uncertainty. It’s part of the process we have in place. But people are our main concern. What else should we be thinking about? … People have the element that cannot be controlled.”

Sign up now—it's Free!

Sponsor Showcase

ThinkAdvisor's TechCenter is an educational resource designed to give you a competitive edge by keeping you abreast of new tech innovations and need-to-know information that can be applied to your business.

Featured Video

At Prudential Advisors, we're dedicated to helping all our clients get on the path to achieve their goals."Prudential Advisors" is a brand name of the Prudential Life Insurance Company of America and its subsidiaries